The Wall Street Journal says the iPhone is coming to Verizon early next year. (Source: FoneArena)

New carrier is unlikely to turn back the Android tide, but should make Apple a tidy sum of cash

Since
the launch of the iPhone one critical factor has remained constant.
In the smartphone's biggest market -- the United States -- the iPhone
was sold exclusively
on AT&T. But that's about to change.

The
Wall Street Journalclaims that
multiple sources brief by Apple have said that a CDMA
iPhone will land early next year on Verizon's network. CDMA
is Verizon's 3G tech of choice. Sprint also uses CDMA, while
T-Mobile and AT&T utilize GSM, a rival standard.

The
iPhone undeniably helped AT&T hang on to its second place spot in
the U.S. However, many customers -- particularly in 2007 and
2008 -- were disgruntled about AT&T's poor voice network.
While AT&T has made a concerted
effort to improve, the experience has still left a bitter taste
in many's mouth, and many still hold
a negative opinion about the carrier's quality of service.

Meanwhile the iPhone is struggling to stave off dozens of
handsets sporting Google's Android operating system which have
flooded the U.S. market. Android has already passed
the iPhone in U.S. sales and analysts generally believe that
it is only a matter of time before it does the same worldwide.
More worrisome for Apple, interest
in the iPhone is also dropping.

A shift to Verizon, the
nation's largest carrier, could help Apple somewhat with both
problems. According
to James Ratcliffe at Barclays Capital, a Verizon iPhone
would grow the carrier's subscriber base by 900,000 in 2011 and sell
9 million iPhones in total (most sales going to existing customers).
Hudson Square Research, on the other hand, believes that Verizon
could gain even more new subscribers, estimating that 4 million
iPhone users would switch
from AT&T -- roughly 18 percent of AT&T's iPhone
subscriber base.

Verizon Communications Inc. President Lowell
McAdam refused to confirm or deny the rumors of an Apple deal,
stating, "At some point our business interests are going to
align. I fully expect it, but I don't have anything to
say."

The report offers a lot of compelling details to
support its claims that the Verizon iPhone is real. It claims
that Pegatron Technology Corp., a contract manufacturer subsidiary of
Taiwanese electronics giant Asustek Computer Inc. won the contract
to produce
the phone. And reportedly Qualcomm is providing the CDMA
chipset for the new phone, though the form factor will stay the
same.

A Verizon iPhone was already prophesied
earlier this year by Bloomberg,
which says the phone will land in January (coinciding with one of
Apple's typical product launch times). However, one of the
sources briefed by Apple told The
Wall Street Journal offers
a new piece of information -- Apple is also working on a different
form factor of its popular device.

If it truly exists, the
real question is whether this form factor is bigger or smaller than
the existing iPhone. A likely scenario seems a smaller
candy-bar like phone, similar to the iPod Nano 5G.

The need
for a Verizon iPhone is illustrated most clearly by subscriber
numbers. According to market researchers at Comscore, in August
2009 there were only 866,000 Android smartphones, compared to 7.8
million iPhones in the U.S. In August 2010 Android had exploded
to 10.9 million phones, while Apple managed an impressive, but lesser
growth to 13.5 million handsets.

Ultimately despite the
"danger" of getting passed by Android, the release of a
Verizon iPhone may be more about bumping up profit and less about
staving off its competitor. After all, Apple currently has only
2.8 percent market share in the global phone market, but it makes
39 percent of its profits thanks to its ability to move
less-than-premium hardware at premium prices and its aggressive
negotiation of supply deals. Android eventually passing Apple
seems inevitable, even if Apple does launch a Verizon iPhone, but the
new phone could send the already profitable company soaring to new
heights in profitability.

Comments

Threshold

Username

Password

remember me

This article is over a month old, voting and posting comments is disabled

Instead of calling the person stupid perhaps you may consider that there is a reason they want the iOS interface? They could have an extensive library of iTunes songs and don't want to convert them all to mp3? Perhaps they prefer the interface of iOS? Just because people don't jump over to your choice of mobile operating system doesn't make them "stupid". It's called consumer choice. You made one with Android. Why belittle someone for preferring something else?

So it wouldn't be stupid to change a carrier just so that you could have a particular brand of smartphone, but it would be stupid to suck it up and stick with the carrier you like, and get a comparable smartphone?

Consumer choice is just that, a choice, but it does not make said choice logical by any means..

Perhaps he uses the iPod for iOS apps too, that you could not get on Android, but if Music is the only reason he carries around two devices then you really have to wonder if he is just trying to validate his purchase of an iPhone4..

(battery life which is always my concern does not seem to be an issue either, as he seems content with having one device if it fits 'his needs')